A salaried employee is a worker who receives a fixed, regular paycheck based on an annual salary, regardless of the number of hours worked. Unlike hourly employees, salaried workers earn the same amount each pay period, even if they work fewer or more than 40 hours in a week.
How are Salaried Employees Paid?
Salaried employees agree on an annual salary during the hiring process. This amount is divided across the year’s pay periods, weekly, bi-weekly, semi-monthly, or monthly, depending on company policy and local labor laws.
Example: An employee earning $85,000 annually would receive around $7,083 per month or $3,541 semi-monthly before taxes.
Salaried vs. Hourly Employees
The main differences include:
- Pay structure: Salaried employees earn a set annual salary, while hourly employees are paid based on hours worked.
- Exempt vs. non-exempt status (U.S.): Many salaried workers are exempt under the Fair Labor Standards Act (FLSA), meaning they are not entitled to overtime pay or minimum wage. Hourly employees are usually non-exempt and qualify for overtime and minimum wage.
- Timesheets: Salaried employees typically don’t track hours, while hourly workers must log time to calculate pay.
- Work-life balance: Salaried jobs often require longer hours but may provide more stability, while hourly jobs may offer clearer boundaries with defined shifts.
Pros and Cons of Being a Salaried Employee
Pros:
- Predictable income and financial stability
- Access to benefits such as health insurance, retirement plans, and paid time off
- More career growth opportunities, especially in professional or managerial roles
Cons:
- Usually ineligible for overtime pay
- May face longer work hours without additional compensation
- Higher overall employment cost for employers (benefits, payroll taxes)
Examples of Salaried Jobs
Common salaried positions include:
- Account executives
- Civil engineers
- Full-time teachers
- Marketing coordinators
- Managers and supervisors
Key Takeaway
A salaried employee is paid a fixed annual salary rather than an hourly wage. While this structure offers income stability and benefits, it often comes with expectations of longer work hours and less flexibility around overtime pay.
